OUTSIDE San José Chiapa, a somewhat shabby town of 8,000 in the Mexican state of Puebla, a vast box-like factory complex is rising out of the fields like a mirage, attended by new highways, flyovers and roundabouts for its lorries and executives. Audi, a German carmaker, is investing $1.3 billion into this project. From 2016 production of its snazzy Q5… will be moved here… Cars from San José Chiapa will be shipped around the world…

Volkswagen, Audi’s parent company, has been building cars in Puebla for decades… they have turned Mexico into the world’s fourth-largest car exporter…

The ways prosperity and modernity spread—or do not spread—around Mexico have been a subject of debate and study for a century or so. In 1926 Robert Redfield, an anthropologist from the University of Chicago who did much to introduce the study of modernization… expressed what he observed in terms of a gap between “los correctos” (the correct), the local elite who were gradually absorbing city ways, and “los tontos” (the fools) who stuck with old traditions.

The gap had a spatial dimension. Near the town’s plaza were the biggest houses and the most competitive artisans; interaction with visitors and tradespeople from outside meant that big-city culture was strongest there. Farther out, the jobs became more traditional; midwives, herbal doctors and firework-makers. At the very edge of town people did not even tell the time; there were no watches, and they were too far away from the plaza to hear the church bell. But though such patterns were part of the story, there was more to it. The tontos were removed from modernity not merely by the walk to the town centre, but by their habits of mind.

Spatial divisions in Mexico’s modernisation are still obvious today… The country’s industrial clusters devoted to the manufacture of cars, planes, electric goods and electrical equipment… are largely to be found in a band next to its northern border…

This part of the country is criss-crossed by trunk roads, railways and gas pipelines which make it an attractive manufacturing destination…

It is in these regions that you find an elite not unlike Redfield’s correctos. Its members have benefited from the reforms that have made Mexico a model of free trade and sound money over the past two decades…

But the bulk of the population continues to live in a land that President Enrique Peña Nieto described in his inaugural address, three years ago, as one of “backwardness and poverty”. This is the Mexico of changarros (makeshift food stands), informal markets, cash-only family firms, peasant farmers and indigenous communities, as well as a vicious underworld. It is where half the population remains poor, on government figures… Its inhabitants may not pay tax, but extortionists, bent lawyers, judges and officials often shake them down for cash.

It is wrong to think of the division between the modern Mexico and the rest of the country as purely one between north and south. As San José Chiapa shows, the distance between them is not just to be measured in kilometres; it is to be mapped in terms of formality and informality, the rule of law and its absence, of race and of culture…

[Ricardo Hausmann of Harvard University’s Centre for International Development]… would like to get more people into the big cities… Geography may not be everything, but it does matter. He thinks the most important thing is to get unproductive workers the specific improvements in their skills they need for better jobs and with safe, reliable ways of getting to those jobs…

Those taking a more sociological view, though, see a different problem. They say that many Mexicans feel that the top-down model of development does not offer them the sort of stability they value. That stability, such people think, is instead to be found in the small businesses in which they mostly work—businesses that are embedded in a culture of family ties rather than rugged individualism…

Some link this cultural reluctance to modernise to the dogged survival of the México profundo—the chunk of society where cultural links to the ancient Mesoamerican civilisation are still strongly felt…

The persistent attachment to scruffy, informal farms and firms may be in part a cultural choice; it is surely also, though, a consequence of earlier failures…. The romantic notions of the México profundo are often peddled by interest groups that benefit from this status quo, such as unions and old-fashioned political bosses with power bases in peasant communities.

In “Why Regions Fail”… James Robinson of Harvard looks at some of these failures and policy biases and the way they affect the south of the country, which is poorer, more unequal and less urbanised than the rest. In colonial Mexico indigenous groups were exploited to benefit a small elite; in the latter two-thirds of the 20th century, the ruling Institutional Revolutionary Party (PRI) controlled a one-party state that left the south in the hands of local barons, he says. It was starved of public funds and infrastructure; to an extent it was made poor, not left poor. “We know today that the south has less efficient legal systems that are less good at enforcing laws and southern states have governments that are more clientelistic and corrupt in the way they interact with citizens,” Mr Robinson writes. He contrasts this with more inclusive institutions emerging elsewhere in the country…

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